Consumers struggle to get over budget jolt

TWO measures of confidence point to consumers still struggling to accept last month's tough budget.

Colin Brinsden, AAP Economics Correspondent

AAPJune 11, 20144:05pm

AUSTRALIANS are struggling to get over the potential hit to their hip pockets from the federal budget.

As the government tries to coerce the Senate into backing several contentious budget measures - including a $7 GP co-payment, changes to the dole and a rise in the pension age - consumer confidence remains in the doldrums.

Two separate readings of consumer sentiment failed to show much improvement after their budget-induced tumble.

One of them found that this budget was the most notable in the past 40 years. And not in a good way.

Treasurer Joe Hockey and Finance Minister Mathias Cormann resorted to penning an opinion piece on Wednesday, calling for the Senate to work with the government.

They point out that only two past Australian governments had held a majority in both the upper and lower houses.

But "almost every government has been able to pass major elements of its budget".

In the Senate, where the government does not have a majority, Labor and the Australian Greens - along with Clive Palmer's cohort of four senators from July 1 - have vowed to block certain measures.

Opposition Leader Bill Shorten says this "rotten" budget is becoming more unpopular by the day and he has a message for Prime Minister Tony Abbott, who is in the United States after visiting Canada and Europe.

"It doesn't matter how many world leaders Tony Abbott meets, he still has problems back home," Mr Shorten told reporters in Sydney.

The Westpac-Melbourne Institute monthly consumer sentiment index rose just 0.2 per cent in June but is still down 6.6 per cent down from its pre-budget level.

Westpac senior economist Matthew Hassan said the result was disappointing given that a response to a budget can be an overreaction that is reversed in following months.

The survey found that 74 per cent of respondents recalled news about "budget and taxation" in the past three months, the highest percentage of people paying attention to those news topics since the survey began in the mid-1970s.

It's also more than when the GST was introduced in 2000.

The latest weekly ANZ-Roy Morgan consumer sentiment index was unchanged but 11 per cent down from when budget measures were first leaked in late April.

Other data suggested the labour market will bring little cheer in coming months with the government's leading jobs index falling for an eighth straight month.

Economists expect Thursday's labour force report for May will show the unemployment rate rising to 5.9 per cent from 5.8 per cent in the previous two months.